585 F.Supp.3d 992
E.D. Mich.2022Background:
- In March 2018 Sullivan’s wife bought an electronic cigarette and four LG 18650 lithium‑ion batteries at a Michigan smoke shop; months later two batteries exploded in Sullivan’s pocket, causing severe second‑ and third‑degree burns.
- Sullivan sued LG Chem, Ltd. (a South Korean corporation) and its Michigan subsidiary in Michigan state court; LG Chem removed based on diversity and the court concluded the Michigan subsidiary was fraudulently joined.
- LG Chem moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2); the court granted limited jurisdictional discovery focused on LG Chem’s contacts with Michigan relating to 18650 batteries.
- Jurisdictional discovery produced evidence of at least two direct shipments of LG 18650 cells to Michigan entities (including one ~50,000‑pound shipment), supplier contracts with two Michigan companies (one containing a Michigan forum‑selection clause), and additional R&D shipments to a Michigan subsidiary.
- Applying the Sixth Circuit prima facie standard, the court found LG Chem’s direct shipments and continuing contracts demonstrated purposeful availment and that the plaintiff’s claims “relate to” those contacts under Ford’s framework, so Due Process was satisfied for specific jurisdiction.
- However, the court held Sullivan failed to show his claims “arise out of” LG Chem’s Michigan contacts as required by Michigan’s long‑arm statute, and because he did not argue or establish that statutory element, the court dismissed for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| General jurisdiction: Is LG Chem "at home" in Michigan? | Sullivan pointed to LG Chem’s asserted investments/employees in Michigan and related subsidiary activity. | LG Chem is foreign, not incorporated or headquartered in Michigan; subsidiary activities aren’t attributable absent alter‑ego showing. | Denied — not at home; general jurisdiction lacking. |
| Specific jurisdiction — Purposeful availment (Due Process prong 1) | LG Chem shipped 18650 cells directly to Michigan entities and contracted with Michigan companies, establishing deliberate contacts. | LG Chem argued it didn’t serve a consumer 18650 vaping market in Michigan and many contacts were via subsidiaries or third parties. | Held for plaintiff — direct shipments and continuing contracts constitute purposeful availment. |
| Specific jurisdiction — Claim "arises out of or relates to" contacts (Due Process prong 2) | Sullivan: the injury from an 18650 in Michigan relates to LG Chem’s Michigan shipments/contracts; Ford permits non‑causal ‘‘relates to’’ relationships. | LG Chem urged narrow product/market definitions and relied on Bristol‑Myers and contrary authority. | Held for plaintiff — under Ford the claim "relates to" LG Chem’s Michigan activities; Due Process satisfied. |
| Michigan long‑arm statute — claim must "arise out of" defendant’s in‑state contacts | Sullivan relied on the Due Process analysis but did not separately demonstrate the statutory "arise out of" causal nexus. | LG Chem argued the cause of action does not "arise out of" its Michigan contacts within the long‑arm statute. | Held for defendant — plaintiff failed to meet the statutory "arise out of" showing, so long‑arm not satisfied; case dismissed. |
Key Cases Cited
- Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017 (2021) (refines "arise out of or relate to" test; some forum relationships support jurisdiction without direct causation)
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (limitations on general jurisdiction; corporation normally "at home" only at place of incorporation or principal place of business)
- International Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts/Due Process foundational test)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and contractual contacts analysis)
- Walden v. Fiore, 571 U.S. 277 (2014) (plaintiff's forum‑based injury alone insufficient for purposeful availment)
- World‑Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (stream‑of‑commerce and foreseeability limits on jurisdiction)
- CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996) (aggregation of contacts and prima facie standard on 12(b)(2))
- Theunissen v. Matthews, 935 F.2d 1454 (6th Cir. 1991) (standards for deciding personal jurisdiction motions without an evidentiary hearing)